Omar will then describe more about our recent acquisition of Origin AI, and then Jeff will briefly describe our 2025 financial results, as well as our long-range financial outlook and capital allocation priorities. Reconciliations to the most comparable GAAP measures are included in the earnings presentation on our website. Non-GAAP cash flow measures include amounts related to our former solar business through 2Q 2024. These forward-looking statements are subject to risks and uncertainties that are laid out in the earnings presentation on our website and in our SEC filings.
Our overall performance for 2025 was within the guidance ranges we shared at the beginning of the year and updated on our October call. He'll also comment on our longer-range financial outlook and capital allocation priorities. We're investing in customer acquisition efficiency, including marketing to new segments and refining our channel strategy. A topic which I'm very excited about is our recent acquisition of Origin AI, which, using advanced presence sensing technologies and intelligence, will enable use cases and features unique to ADT.
The third area in which we're making 2026 investments is improvements in new segments and acquisition efficiency. We're refining our overall marketing approach with an objective of rationalizing our highest cost acquisition sources, which includes affiliate marketing partners and in some cases, our dealers. We expect this to have a near-term effect of reducing our organic new subscriber additions while strengthening longer-term economics for our overall go-to-market ecosystem. We'll also continue to evaluate bulk account purchase options and potentially full acquisition opportunities in our industry with attractive economics.
What went well
- Full-year 2025 revenue rose 5% to $5.1 billion, adjusted EBITDA grew 4% to $2.68 billion, and adjusted EPS jumped 19% to $0.89.
- Adjusted free cash flow including swaps grew 16% in 2025, enabling nearly $800 million returned to shareholders (~$600 million in buybacks and $187 million in dividends).
- Reduced leverage to 2.7x adjusted EBITDA through several debt transactions, including refinancing the 2028 notes and all but $75 million of the April 2026 notes.
- Acquired Origin AI, adding Wi-Fi-based ambient sensing technology backed by 200+ patents, and signed a five-year licensing agreement with Verisure worth a minimum of $30 million plus activation fees.
- Announced a new three-year, $1.5 billion share repurchase authorization while maintaining the quarterly dividend.
- Introduced a multi-year financial framework targeting ~5% revenue CAGR, ~10% EPS CAGR and 10%+ adjusted FCF growth, plus a goal of 1 million more subscribers by 2030 and improved attrition toward 11%.
What went wrong
- Attrition ended the year at 13.1%, behind the record level reached earlier in 2025, due mainly to elevated non-paid disconnects.
- 2025 ending RMR was approximately flat to 2024, reflecting the October divestiture of the multifamily business (~200,000 subscribers, ~$2.6 million RMR).
- Management guided 2026 revenue and EPS to be approximately flat to 2025 as it prioritizes cash generation and share repurchases.
- 2026 guidance includes roughly $45 million of additional subscriber acquisition costs from tariffs and about $50 million of incremental investment spend.
- Rationalizing high-cost acquisition channels (affiliates and some dealers) is expected to reduce near-term organic new subscriber additions.
- The company flagged offsetting pressure in 2027 from higher cash taxes and interest.
Reported 2026-03-02 · figures from the ADT Inc. Q4 2025 earnings call.